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(04-08-2013, 06:46 PM)quantcall Wrote: [ -> ]
(04-08-2013, 03:46 AM)raiden Wrote: [ -> ]Been struck with E5H for 3 years. No light at the end of the tunnel.....

there might be a rebound ahead, actually it has a very high correlation with noble. noble shows some sign already

Looks like i got no choice. Been doing less stock and more forex recently =)
What I know is the CPO price as of 30/9/13 is slightly higher than 30/6/13 but slightly lower than 30/9/12. Hope that the upcoming result gives some lights in recovery.
There are alot of other uses for palm oil. In fact we use them everyday, not only in cooking but in soap, detergents etc. The world is gearing towards more uses of biofuel and CPO is a the obvious choice, especially with crude at such high prices now. Moreover, CPO is harvested is definitely more sustainable compared to crude.

Imagine rows and rows of palm trees on tracts of land bigger than Singapore. It is happening in Amazon Basin (Brazil), Indonesia, Malaysia, PNG and who knows where else. The big agri companies are not stopping.. ask Wilmar, Cargill, Archer Midlands.

Not vested.
(21-10-2013, 11:18 AM)valuebuddies Wrote: [ -> ]What I know is the CPO price as of 30/9/13 is slightly higher than 30/6/13 but slightly lower than 30/9/12. Hope that the upcoming result gives some lights in recovery.

The upcoming quarter might disappointed, QoQ CPO price is still dismal, and discounting the plantation that have at libya, their productions cannot grow much enough more, so they can't use volume to offset low margin.

Biofuel use now is still small as compared to edible oil, and the more affluence will switch to healthier option, palm oil as the final product as cooking oil is fast losing its allure in Singapore, just take a look at the supermarket, but as a by-product in the making of chocolate and etc, and also the third countries, the demand should be still strong.

I am willing to wait out the long trough, as I still see strong demand of this commodity. Looking at the few plantation plays from Singapore in SGX, such as first resources and bumi-agri, etc, they still have quite a bit of concession land to expand, so we will not see supply squeeze anytime soon, without any economic revival from the main economic blocs, there is little chances of CPO revival. Don't count on malaysia and Indonesia diesel law of adding CPO to diesel, given the pace they push through government policies, it will be years before anything concrete happen.

IN the long run, I am more optimistic though, Indonesia has stop giving concession of large areas, the African states will take a lot more years before production become significant, and when supply growth is low and demand growth (due to population growth and revival of economies) is higher, we should see higher prices in the long run (also the effect of inflation)

In fact, I am quietly waiting for price to fall further and accumulate more, as the longer the CPO, the slower the supply growth as competitors are kept out.
Why is it so hot? Technical breach of 200MA?
Golden agri Indonesia Subsidiary turn in a rather so-so quarter results, that was further drag down by currency weakness...

Well yesterday's party lasted only 1 day...
4Q2013 & Full Year Results out

Results link

Improved quarter, lousy year.

CPO Prices recovered (now at around RM2800?), which pretty much explains the "recovering" quarter of GAR and the recent stock prices of CPO producers/traders.

4QYoY change is dramatic, revenue up, gross profits, ebitda and net profit all up huge, however FY2013 vs FY2012 doesn't look good-

Their debts went up, interest-bearing debts up 39.2% to US$2.5bn, cash lower by 14.4% to US$587m.

Net debt/EBITDA now stands at 3.01x, higher than previous year's 1.49x, and EBITDA/interest expense now stands at 6.51x vs 10.40x.

Free cash flow is negative $500m due to high capex & low cash from operating activities.

FY13 op. profit margin at 8%, lower than FY12's 11% despite higher sales.
The lower export tax added about 30M to the bottom line. With CPO prices on the rise due to dry weather and lower export tax, CPO producers should be enjoying higher profit margins moving forward.

In my view, the best time to increase production capacity is when the entire industry is in the trough of the commodity cycle. So Golden Agri will reap the rewards when the industry bottom out.

For those vested and interested...

Golden Agri soars on positive earnings

SINGAPORE - Golden Agri-Resources outperformed a jittery Singapore stock market on Monday, heading for its biggest daily gain in six months after well-received earnings.

Shares of the palm oil plantation firm jumped 5.4 per cent to a three-month high of S$0.585, with more than 143 million shares changing hands.

Golden Agri reported a 129 per cent surge in fourth-quarter net profit on Friday, helped by a better sales performance in China.

OCBC Investment Research maintained its “hold” rating on Golden Agri, increasing its fair value to S$0.52 from S$0.50 and its 2014 revenue estimate by 2 to 3 per cent.
Golden Agri turns over a new leaf


Golden Agri-Resources (GAR) has evolved from being a black sheep in the industry to become a leader in sustainable palm oil policies - PHOTO: BLOOMBERG
application/pdf iCONTurning eco-friendly
[SINGAPORE] Golden Agri-Resources (GAR) has evolved from being a black sheep in the industry to become a leader in sustainable palm oil policies.
In 2009, the group came under attack by Greenpeace for being involved in illegal deforestation and the clearing of peatland.
GAR refuted the charges. But customers such as Unilever, Nestle and Burger King started dropping the largest Indonesian palm oil producer as a supplier.
Shaken, the firm turned to The Forest Trust, a Swiss non-profit organisation, and paused all its bulldozers in end-2010 - an action equivalent to an airline grounding its airplanes, said Peter Heng, its managing director of communications and sustainability.
"There was this need to bridge the lack of trust and confidence (between both parties)," he said. "Greenpeace had their maps, we have our maps."
With work stopped on clearing land, space was therefore given for both to agree on the no-go areas.
"We took a fair amount of time to agree on the common ground, which is that it must conserve forests, create jobs and create long-term sustainable growth," said Mr Heng. "We are a business, so it has to be pragmatic, and make business sense."
Shortly after, in February 2011, GAR announced a new forest conservation policy to identify high carbon-stock forests, high conservation value areas and peatlands.
But the move was viewed coldly by the rest of the industry - until Wilmar's recent announcement.
"The rest of the industry said that's just GAR, they've responded to Greenpeace, they've broken ranks with the rest of us," said Scott Poynton, executive director at The Forest Trust. "To me that was a bit of a surprise. The industry got upset and moved into the opposite direction."
In February this year, following Wilmar's footsteps, GAR extended its forest conservation policy to all of its third-party suppliers as well.
For now, there is still resistance from some quarters in the industry, said Mr Poynton, who is also working with Wilmar.
"The rest of the industry unfortunately is still stuck in the mindset that the only way to grow the business is by buying more land," he said. "Of course, the other way to grow is to have more palm oil per hectare of land."
Which is what GAR has done, introducing a yield improvement programme in February 2012.
The firm is now also treading new ground in engaging the Indonesian government to implement some of its policies.
As part of its forest conservation policy, it has set aside 19,000 hectares of high carbon-stock forests across eight concessions. But it runs the danger of this land being passed on to another firm.
"When they hand out concessions, these come with conditions that you develop them within a certain time. If you set aside land, that land is in theory not developed. They can invoke the abandoned land policy," explained Mr Heng.
GAR is also in discussion with the government on a land swap for these 19,000 hectares - a policy that is provided for by Indonesian law but not yet put in practice.
Putting behind it the acrimonious relationship with Greenpace, GAR now strongly believes that the path towards sustainability has to be a multi-stakeholder approach, involving the community, industry and government.
"The multi-stakeholders must be focused on agreeing on the common ground. That is where the change will come about," said Mr Heng.
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